Reports of another wave of layoffs rekindle bad press for Microsoft

Microsoft's massive staff reduction, which shocked many when it was announced in July, is back in the spotlight with a pair of reports that the ax will come down on another group of employees Thursday.

A second wave of layoffs is reportedly coming Thursday, as Microsoft moves to eliminate a total of 18,000 jobs by June of 2015

By
Juan Carlos Perez
| 17 Sep 2014

Microsoft's massive staff reduction, which shocked many when it was announced in July, is back in the spotlight with a pair of reports that the ax will come down on another group of employees Thursday.

It would be the second wave of job cuts in the plan to ultimately eliminate 18,000 positions, or 14 percent of the company's staff, by the end of its fiscal year on June 30, 2015, according to reports this week from ZDnet and GigaOM, both based on anonymous sources.

When Microsoft first announced the job cuts -- the largest staff reduction in the company's history -- some questioned the wisdom of carrying them out in stages over the course of 12 months, saying that it would do a number on the already shaken employee morale and periodically reopening the wound from a public relations perspective.

The company back then didn't explain why it opted to drag out the process instead of getting them done in one take. CEO Satya Nadella was specifically singled out for criticism because he framed the explanation for the layoffs in what some felt was cold and distant marketing-speak in his public memo to employees, which he peppered with terms like "synergies" and "strategic alignment."

Now, two months later, Microsoft's layoffs plan is back to dominating the headlines about the company. With it come reminders that the staff reduction effort is focused heavily on employees acquired from Nokia's devices and services business. That $7.2 billion acquisition was brokered by Steve Ballmer, Nadella's predecessor. Some industry analysts have speculated that Nadella isn't enthusiastic about the original deal and that he will eventually divest Microsoft of that Nokia business altogether, getting Microsoft out of the cell phone hardware market.

It's not clear how many more waves of layoffs Microsoft expects to carry out before the reduction is completed. In the July press release, the company stated that the "actions associated with the plan" would be "substantially complete" before the end of 2014, and "fully complete" by June of next year.